ERG: Announces sale of ECard Shareholding

TELSTRA CORPORATION LIMITED. 2002-11-14 ASX-SIGNAL-G
HOMEX - Melbourne
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The ERG Group today announced the sale of its 39% shareholding in
ECard Pty Ltd (ECard). The shares will be bought back by ECard under
a selective buy-back agreement for $5 million payable immediately.
The buy-back will leave existing shareholders, Telstra and ANZ
holding 100% of ECard.
ERG considers the likely timeframes for returns from its ECard
shareholding to be longer than that expected by its own shareholders.
Accordingly, the investment has been realised with the funds to be
redirected into the core business. The investment in ECard had
previously been written down to zero in ERG's balance sheet, giving
rise to a profit on this transaction.
Under the agreement, ERG and ECard will maintain a strong
relationship in supplying each other with, and working together on,
multi-application smart card systems that have strong commercial
drivers and rewards for both parties. ECard has retained its licence
rights to the Proton technology owned by ERG.
Mr Rob Noble, ERG's Managing Director Asia Pacific, said, "While we
have sold our shareholding in ECard, we will continue to work closely
with them on commercial opportunities. From a strategic and
operational standpoint, we expect to maintain and enhance our
relationship with ECard and its shareholders Telstra and ANZ Bank.
"In addition, the transaction is clear evidence that despite our
accounting treatment of this type of investment, it represents
tangible value for the ERG Group."
Formed in June 2000, ECard provides smart card multi-application and
management services in addition to infrastructure and support of
multi-application card issuers. ECard is currently providing services
to customers such as ANZ Bank, TAFE NSW, La Trobe University and
Smart Visit Solutions.